ABSTRACT

This paper provides evidence that all‐equity firms exhibit greater levels of managerial stockholdings, more extensive family
relationships among top management, and higher liquidity positions than a matched sample of levered firms. Further, top managers
of all‐equity firms with family involvement in corporate operations have greater control of corporate voting rights than managers
of all‐equity firms without family involvement. These findings are consistent with the interpretation that managerial control
of voting rights and family relationships among senior managers are important factors in the decision to eliminate leverage.